U.S. Stocks Set To Open Lower After The Initial Jobless Claims ReportS&P 500 futures are pointing to a lower open as the economy continues to lose jobs while U.S. – China tensions increase.
U.S. Initial Claims Report Comes In Line With Analyst Estimates
S&P 500 futures are pointing to a lower open following the release of the U.S. Initial Jobless Claims report which showed that 2.4 million Americans filed for unemployment benefits in a week, in line with analyst consensus.
Continuing Jobless Claims report showed that 25 million people were getting unemployment benefits compared to consensus of 24.8 million. It should be noted that Continuing Jobless Claims data lags Initial Jobless Claims data by one week.
Today, the market will also have to digest Flash PMI numbers for May. Markit Manufacturing PMI Flash is expected to rise from 36.1 in April to 38 in May, while Markit Services PMI Flash is projected to increase from 26.7 to 30.
World Coronavirus Cases Pass The 5 Million Mark
According to data from Johns Hopkins University, the number of registered coronavirus cases in the world is 5,019,676. U.S. remains the leader with more than 1.5 million cases, with Russia in the second place with more than 300,000 cases and Brazil ranking third.
The recent rise in the number of coronavirus cases in Latin America has raised worries about the situation in the region. Latin America is less prepared to deal with the crisis compared to Europe so its problems with containing the disease may lead to an additional downside revision of the world economy’s growth in 2020.
Another region that may worry the market is Africa, where the epidemic is just getting started but could lead to various disruptions in the resource-rich continent if it is not contained.
U.S. – China Tensions Increase Again
U.S. President Donald Trump has renewed his pressure on China for its failure to stop the spread of coronavirus, saying that China could have easily stopped the disease but did not do it.
Now that the U.S. wants to reroute supply chains out of China while it also tries to limit Huawei’s ability to access modern chips, investors and traders are watching for the signs of a new round of trade war between the two biggest economies in the world.
Making changes to the existing supply chains always comes at a cost so any escalation in U.S. – China relations will further hurt the world economy. However, it remains to be seen whether such escalation will be bearish for markets that are generally optimistic on the upcoming recovery.